New report warns of insurance crisis, charts path for equitable resilience in face of climate disasters
The analysis, “Who Pays for Climate Disasters?,” reveals a system in retreat, leaving residents vulnerable as private insurers abandon markets and shift costs to the public.
HONOLULU, Hawaiʻi — A new report from the Hawaiʻi Appleseed Center for Law & Economic Justice, “Who Pays for Climate Disasters? Case Studies on Regulatory Responses to Climate Change-Related Disasters,” arrives at a pivotal moment for Hawaiʻi.
The convergence of an aging housing stock, skyrocketing insurance costs, and the accelerating impacts of climate change all threaten the financial stability of families, condominium associations, and the state’s entire disaster recovery infrastructure.
The report’s central finding is that the private insurance system—strained by mounting climate disaster claims—is failing. Insurers are adopting harmful strategies, such as taking in record profits while retreating from high-risk markets like Hawaiʻi and imposing sharp premium increases. This is creating a self-reinforcing cycle of risk and abandonment.
The urgency of this report stems from a dangerous and rapid shift in the insurance landscape, making Hawaiʻi uniquely vulnerable:
Market Exodus: Between 2018–2023, nonrenewals of insurance policies in Hawaiʻi increased by a staggering 216 percent.
Soaring Costs: Homeowners have seen average premium increases of 12 percent (2021–2024), while condominium associations have faced 16 percent average increases, translating to fee hikes of up to $2,000 per unit.
Compounding Vulnerabilities: Over 60 percent of Hawaiʻi’s housing was built before 1990, requiring costly resilience upgrades. Simultaneously, 40 percent of the housing stock is in multifamily buildings, where insurance is a non-negotiable prerequisite for mortgages, sales and affordability. Without it, the foundation of housing mobility and equity crumbles.
“The question is no longer if another major climate disaster will strike Hawaiʻi, but when,” said Hawaiʻi Appleseed Executive Director Will White. “The alarming retreat of the private insurance market is a flashing red light. Our report shows that our current financial and regulatory systems are unprepared. If we do not act decisively, the cost of recovery will fall disproportionately on those least able to bear it—working families, kūpuna, and fixed-income households.”
Report Highlights & Recommendations
The report analyzes how climate disasters are reshaping insurance markets nationally and provides a focused examination of Hawaiʻi’s precarious position. It investigates the historical interplay of disasters, market retrenchment, and government intervention, highlighting the equity implications of a system where protection is becoming a privilege of the wealthy.
To build a resilient and equitable future, the report outlines a multi-pronged strategy for Hawaiʻi:
Empowering State Action: Enabling the state to pursue subrogation against corporations most responsible for climate-changing pollution to recover disaster costs.
Building Smarter: Reshaping land use to create natural buffers and rigorously adopting and enforcing updated building codes for all new construction.
Retrofitting for Resilience: Creating pathways and resources to retrofit older housing stock to withstand climate impacts.
Community Empowerment: Expanding education on risk management and available resources to help households and communities take preventative action.
“The solutions we propose are about fairness and foresight,” said Hawaiʻi Appleseed Director of Research and Housing Policy Arjuna Heim, who authored the report. “They are about ensuring that the financial burden of climate change is borne by those who profited from creating the crisis, and that we invest now in protecting our people and our homes. We start by making polluters pay and building a Hawaiʻi that is resilient by design.”
The full report, “Who Pays for Climate Disasters?: Case Studies on Regulatory Responses to Climate Change-Related Disasters,” is available for download at: https://hiappleseed.org/publications/who-pays-climate-disasters
